Invenergy bid to build 715-MW gas project was rejected by Duke

Invenergy Thermal Development LLC offered to build a 715-MW, gas-fired combined-cycle plant for Duke Energy Carolinas LLC, but that bid was eventually rejected in favor of the utility’s own 750-MW gas project.

Invenergy’s Vice President of Thermal Development, Daniel Ewan, offered a few details of the company’s project in Dec. 10 testimony at the South Carolina Public Service Commission. The commission is reviewing an October application from Duke Energy Carolinas and the North Carolina Electric Membership Corp. for a certificate of public convenience and necessity on a 750-MW Duke gas-fired project to be located near Anderson, S.C.

Ewan said that in November 2012, during a Duke request for proposals (RFP) process, Invenergy offered a 20-year tolling agreement for a 715-MW, 2×1 combined-cycle plant that Invenergy would build in Anderson County. That bid made the Duke short list, but Invenergy was eventually told in October of this year that Duke would pursue another option for the needed capacity. Duke then filed with the commission for approval of its own 750-MW project at its existing Lee power plant site.

In the Dec. 10 testimony, Ewan criticized the Duke RFP review process, saying it was “devoid of transparency” and in “stark contrast” to other RFP processes the company has participated in across the U.S. “There was no assurance that the internal Duke evaluation team conducted their analysis of all 34 bids, including Duke’s, without further communication or influence from the internal Duke team that developed the bid,” he added. “Last, there was no opportunity for the bidders, other than maybe Duke itself, to review Duke’s interpretations or the bids and the assumptions made in modeling them.”

Duke on Dec. 9 argued that Invenergy should not be allowed to intervene in this case at all, in part because it has sustained no injury and thus has no standing in this matter. Duke said that Invenergy has no right to see the bid results and that South Carolina statute doesn’t protect Invenergy from the harm of not getting picked as the RFP winner.

PSC staff filed a Dec. 12 letter with the commission supporting Invenergy’s intervention request, saying the independent power producer may have information that could be useful.

The Lee gas-fired plant being developed to replace coal capacity

The plan by Duke Energy Carolinas, a subsidiary of Duke Energy (NYSE: DUK), to add a 750-MW, gas-fired combined-cycle plant at its existing Lee Steam Station is part of a broader plan that is in part needed to make up for the shutdown of coal-fired capacity on the system, including at the Lee site.

Writing supporting testimony for the October application was Janice Hager, Vice President, Integrated Resource Planning and Analytics for Duke Energy Business Services LLC, the service company subsidiary of Duke Energy.

Hager noted that following the completion at the end of 2013 of the coal-fired Cliffside Unit 6 (825 MW) and the 620-MW Dan River Combined Cycle gas facility, and the recent retirements of the coal-fired Riverbend Units 4-7 (454 MW) and Buck Units 5-6 (256 MW), the Duke Energy Carolinas existing generation portfolio mix includes 7,172 MW of coal, 1,240 MW of combined cycle, 2,770 MW of combustion turbine, 5,965 MW of nuclear, 3,229 MW of hydro, 251 MW of purchases, 911 MW of demand side management and 185 MW of renewable energy.

In the current planning horizon, the coal-fired Lee Units 1-2 (200 MW) are projected to retire on or before April 15, 2015. Lee Unit 3 (170 MW) is projected to retire as a coal unit and to be converted to natural gas before the summer of 2015.

In November 2012, Duke Energy Carolinas received multiple proposals from twelve companies including a self-build bid for the construction of a natural gas combined cycle facility at the existing Lee site in Anderson County, S.C., said the application. The bids were reviewed for compliance with RFP guidelines and were ranked economically to determine the least cost options. The initial economic analysis identified the short-listed bidders to continue proposal discussions. In late February, Duke notified the short-listed bidders to provide refreshed proposals to meet capacity needs beginning June 2017. The Lee self-build option was picked after refreshed bids were taken.

The Lee combined cycle facility would use two combustion turbine generators (CTGs), two heat-recovery steam generators (HRSGs), and one steam turbine generator in a “2×1” configuration. Duke Energy Carolinas evaluated F Class and Siemens H Class combustion turbine technologies in various configurations. The 2×1 technology selection was chosen based on the need as well as the company’s and industry experience. The need fits well with current F Class technologies that are designed with moderate duct burning capabilities.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.